Legal Briefs:

Avoiding Probate, Part I: Joint Tenancy

by Susan Murray and Beth Robinson

In a previous column we discussed the
importance of having a valid Will. In this column
and in next month’s column, we will discuss
alternatives to placing all of your property into a
Will.

First of all, we want to emphasize that making a

V Will should be a fundamental, primary part of

every gay person’s preparation for the inevitable
— our deaths. A Will allows you to control who
will inherit your property, including real estate,
savings, and personal possessions. If you are a
single parent, a Will allows you to name the

person you want to be the Guardian of your child

upon your death. You can also appoint the person
you want to supervise the distribution of your
property. In addition, a Will allows you to
specify your funeral/cremation wishes. Finally, a
Will is a flexible document, since you can change
it at any time until you die (assuming you are
mentally competent to do so). Given all of its
advantages, a Will should be a basic planning
tool for most people.

Unfortunately, a Will also has one feature that
some people consider to be a big disadvantage:
when you die, your Will must be presented to the
probate court (this is called “going through
probate”).

Before any of your property can be distributed to
the beneficiaries you have named in your Will,
the probate court must first decide whether you
were competent at the time you signed your Will,
and whether the document was witnessed
properly. Assuming the court finds that the Will
is valid, the court will then require the
representative you have named in your Will to
prepare a detailed list of your property, including
its value. Then, if anything needs to be sold (to
pay taxes or hospital or funeral bills, for
example), your representative will have to get
permission from the court to make any sale. The
representative will also have to get permission to
distribute your property to your beneficiaries.
Finally, the representative will be required to file
at least one accounting to show that your bills
were paid and that the beneficiaries got the
correct assets. It is not necessary to have a lawyer
involved in the probating of your estate, but if
there are substantial assets, the judge might
suggest that a lawyer, and possibly an
accountant, be hired. '

Some people consider the involvement of the
probate courts to be unnecessary, or unduly
time-consuming and expensive. However, if you
have any questions about whether your family
will try to take property that you want your
partner to have, the probate court’s supervision
can be an extremely helpful way to ensure that
your wishes are followed.

The more property you have placed in your Will,
the more complicated, expensive, and
time-consuming the probate process will be. In
Vermont, the probate courts are helpful and
fairly efficient, and the process generally is
relatively inexpensive. However, if you retire to
another state before you die, the probate court
system is likely to be much more cumbersome
and substantially more expensive. The hassle and
expense experienced by people in larger states
such as Florida, California, and New York has
caused people toitry to devise estate plans which
avoid probate.

One of the simplest ways to avoid probate it to
put your property in joint names. Thus, you can
add your lover’s name to the deed to your house
(make sure you call it a “joint tenancy with
rights of survivorship” and not a “tenancy in
common”). Once you become “joint tenants with
rights of survivorship” on the deed, whichever
of you lives longer will automatically inherit the
house upon the first person’s death, with no need
to go through probate. You can also do this with
savings and checking accounts, certain
investment accounts, and stock shares.

There is one obvious advantage for gays and
lesbians in creating joint tenancies. Since the
property automatically passes to your “joint
tenant” without passing through probate, naming
your partner as a joint tenant will ensure that he
or she will automatically inherit your home and
savings. If you put this ~ property in your Will
instead, you might have to worry that your blood
relatives will successfully challenge your Will.

However, there are some major disadvantages to
creating a joint tenancy. First, if you put your
partner on your real estate deed, you will be
required to pay a property transfer tax, since the
state of Vermont will consider the addition of
your partner’s name on the deed to be a “sale” of
the property. It shouldn’t surprise you that
legally’ married couples can do this without
having to incur this tax, since the legislature has
created an exception for “spouses.”

The second major disadvantage to creating a
joint tenancy is that once you put your partner’s
name on your deed or on your bank account or
stock shares, you cannot remove your partner’s
name without his or her permission. This is true
even if all of the money in the account was
deposited by you, and even if all of the money
for the down payment on the house was
contributed by you, and ‘even if you were the
only one who ever paid any of the mortgage or
taxes or insurance or repairs.

Another disadvantage is that a joint tenant can
sell his or her interest in the joint property at any
time, to anyone. Further, a joint tenant has the
right to withdraw any amount of money from a
joint bank account at any time.

Since you can’t “undo” a joint tenancy as easily
as you can revise your Will, you should think
very carefully about the ramifications before
creating a joint tenancy to avoid probate. On
balance, you may decide that you’d rather have
the ability to retain exclusive control over your
property during your entire lifetime. If that’s the
case, you should put your property into your
Will, and allow the probate court to supervise
the distribution of your property after -death.

Susan Murray and Beth Robinson are attorneys
at Langrock Sperry & Wool in Middlebury,
Vermont whose practices include employment
issues, family matters, estate planning, personal
injury and worker's compensation cases, and
general civil litigation. This column features
timely information .about legal issues of interest
to our community. We hope_ to provide
information about important laws and court
cases that may affect our rights, as well as
practical nuts ‘and bolts advice for protecting
ourselves and our families. If you'd like to see us
cover a particular topic, please feel free to write
OITM or call us at 388-6356. V

 

32 N. Champlain St. Burlington VT. 05401
802/864 - 7198 ° FAX 802/658 0 1556

September 1996

Chiltern Club’s Vermont Chapter
Underway

FAYSTON -- The Vermont chapter of the Chiltem Mountain
Club will be meeting Sept. 21 in the Mad River Valley for a
hike and then a potluck supper.

The Vermont chapter still is getting organized, so anyone
intested in hiking and other outdoor activities is encouraged
to attend either just for the hike, the potluck or both.

Meet at 2 p.m. for the hike at the home of Ross Sneyd in
Fayston. That's near where the Sugarbush and Mad River
Glen ski areas are. The potluck will be at 6:30. For directions or
questions, Contact Ross at 583-1299 or at
RossSneyd@AOL.com.

For additional information on Chiltem, contact Bob Bland at
333-9448 or bland@sover.net. There also is a World Wide Web
page for Chiltem at http:/ /www.chiltern.org.chiltem. V

Mr. Upstate New York Leather
Contest Planned

UTICA NY -- The Utica Tri’s will host their seventh annual
production of the Mr. New York Leather Contest during the
weekend of October 19-20 at That Place, their home bar.

Frank Nowicki returns as Emcee; judges include reigning Mr.
Upstate New York Larry Gazzilli and the current International Mr.
Leather, Joe Gallagher. Winners of this year’s contest will receive a
prize package worth several thousand dollars, including entrance

fees and a transportation/accommodation allowance for the Mr.

Mid—Atlantic Contest to be held in Washington DC next January.

Contestants from New York and surrounding states, as well as
nearby Canadian provinces, are eligible to enter.

Information on contestant eligibility, judging requirements, and
contest fees may be obtained by writing the Utica Tri’s at PO
Box 425, Utica NY 13503-0425 or by e-mailing them at
utrismc@aol.com. The deadline for registration is October 5,
1996. V

Saucy Jack

& the Space Vixens

  
  
   

opening
in
October...

SENATE